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For Immediate Release
May 1, 2008

AUSTIN, Texas –The Tenth Farm Credit District today reported strong first-quarter financial results, despite changing economic conditions.

“Although agricultural commodity prices and exports are at record high levels, rising input costs are making it more expensive to produce a crop and feed livestock,” said Larry Doyle, chief executive officer of the Austin-based Farm Credit Bank of Texas (FCBT). “These factors combined are beginning to put heavy credit demands on agricultural lenders, including Farm Credit cooperatives,” Doyle said.

“However, the Farm Credit System was established to provide agriculture with a reliable source of credit, even when other lenders may be facing funding and liquidity hurdles in today’s tight credit markets,” he said. 

As a government-sponsored enterprise, Farm Credit financing cooperatives receive their funds through the sale of highly rated Farm Credit securities in the nation’s money markets.

The Tenth Farm Credit District is part of the Farm Credit System, the nation’s largest rural lending organization. The district is composed of the Farm Credit Bank of Texas and 20 rural lending cooperatives in Alabama, Louisiana, Mississippi, New Mexico and Texas.

Tenth District net income totaled $69.8 million for the quarter ended March 31, 2008, up 4 percent from the same period of 2007. The increase was primarily the result of an increase in net interest income, largely attributable to loan volume growth.

The district set a new loan volume record, with gross loans totaling $15.7 billion at quarter end, a 3.8 percent increase from Dec. 31, 2007, and a 16.4 percent increase from a year earlier.

While the volume of total high-risk assets increased by $34.7 million, or 27.7 percent from year-end 2007, the credit quality of the district’s loan portfolio remained very strong. Loans classified as acceptable accounted for 98.8 percent of the portfolio — unchanged from three months ago and a year earlier.

“Recently, our Tenth District lending cooperatives returned $133.7 million in patronage to their customers, based on 2007 earnings. We hope that these patronage payments will help defray rising operating expenses for our agricultural producers,” said Ralph W. Cortese, FCBT board chairman.

The Tenth District had $18.6 billion in total assets at March 31, 2008. Stockholder equity was $2.3 billion.

The Farm Credit Bank of Texas also reported strong first-quarter financial results. The bank earned $21 million in net income in the first three months of 2008, a 20 percent increase over the same quarter in 2007. The bank’s gross loan volume at March 31, 2008, totaled $11 billion, up 1.2 percent from year-end 2007. Bank assets totaled $13.7 billion.

The Tenth District lenders provide loans and financial services to agricultural producers, agribusiness firms, country homeowners and other rural landowners.

Nationally, the Farm Credit System reported combined net income of $770 million for the quarter ended March 31, 2008, compared with combined net income of $654 million for the same period of 2007.